Why buysiders say 2020 could be the year of the CNS
Neurology is back, as buysiders home in on 2020 opportunities
A pair of CNS approvals in the final days of 2019 has only added to the growing momentum buysiders were already tracking for 2020 in the once neglected disease area.
Positive regulatory signals are converging with clinical wins and early-stage scientific advances to put neuroscience back on the radar, after long being viewed as too risky by investors and having been all but abandoned by pharmas.
Aducanumab from Biogen Inc. (NASDAQ:BIIB) is the focal point. If FDA approves the Alzheimer’s therapy, investors think it could be a harbinger of more approvals to come across neurology indications.
“It may be the year of CNS, finally. With Biogen guiding to submit aducanumab, and constructive dynamics with the FDA, I think that could unleash a torrent of investing in CNS,” EcoR1 Capital’s Oleg Nodelman told BioCentury.
Buysiders also are watching progress in neuropsychiatric conditions, including treatment-resistant depression, and in rare neurological indications, such as Huntington disease (HD), where antisense oligonucleotides and other RNA modalities are competing to knock down the target that drives the pathology.
Outside of CNS, investors are eyeing a slate of late-stage readouts, proof-of-concept studies from innovative platforms, and a series of biotech launches following another year of large numbers of approvals.
For the most part, the 14 buysiders interviewed by BioCentury expect to continue to play in the smid-cap range in 2020, but some think large caps could help draw generalists back to the sector. Biotech’s strong performance in 4Q19, coupled with a spate of M&A deals and Biogen’s turnaround story for aducanumab, have piqued generalist interest at a time when large cap valuations are at their most attractive in a decade (see “Politics Aside, 2020 Could Be a Good Year for Bringing Back Generalists”).
The clinical catalysts in the spotlight include readouts in another therapeutic area that’s been out of favor -- cardiovascular disease. Oncology and rare diseases are of course in the mix, and non-alcoholic steatohepatitis (NASH) could notch new wins.
On the new modalities front, RNA therapeutics will be in sharp focus, as will two not-yet-validated modalities with inflection points: CRISPR and targeted protein degraders.
Gene and cell therapies, by contrast, will likely see incremental advances this year, as companies work out kinks, design next-generation versions and catch up to their multiples. The BCMA showdown could prove an exception;